Jim McGlothlin stands in front of what he hopes will be the entrance to the new casino in the old Bristol Mall. Photo by Tara Hodges, SweetSnaps Photography
By Scott Robertson
Clyde Stacy and Jim McGlothlin, two men with a history of starting successful companies, are taking a long-shot gamble with multi-million dollar stakes in Bristol, Va.
It’s a necessary gamble, they say, because the city is facing a bond-debt load it is unlikely to be able to meet. While city government officials say they have taken great strides in keeping Bristol from having to turn in its charter and become a town, Stacy, McGlothlin and others believe that building a privately-funded casino, resort and convention center is the only way to save the city.
“The idea came from Clyde Stacy, not me,” McGlothlin told The Business Journal during a Nov. 15 interview at the headquarters of The United Company in Bristol. “(I) had looked at buying the mall, knowing I could get a pretty good price, but just could not think of a single thing to do with it. I mulled it over for a long time. I ran into Clyde months later – maybe a year later – and he told me he had bought the mall. I said, ‘What in the world for?’ He said, ‘Well, I want to try to put a casino in there.’ I said, ‘Well, you’ll have to get approval from the state and probably have a referendum here. It just seems like that would be an uphill battle.’ He said, ‘it would but it’s worth it because it’s the one thing that’s a moon shot for this town. We’re losing jobs here. This is one thing that will bring employment and taxes to the city. We think most of the people who would use it are from another state, so it’s just a big win for the city.’”
The bond debt facing the city arose from Bristol’s retail play, The Falls, a shopping center funded by taxpayer dollars. “The Falls was a mistake,” McGlothlin said. “Everybody knows it was a mistake. But the city council that made that mistake isn’t this council. I’m so appreciative of the current council today and their ability to make decisions and come to reasonable conclusions.”
The main reason McGlothlin says the casino project makes sense where the Falls didn’t is that the private sector, mainly Stacy and himself, will fund the project. “This isn’t going to be supported by any tax structure,” McGlothlin said. “As a matter of fact, this is going to help pay for the mistake of the Falls by helping pay those bonds off. So, the state will end up putting less money into this end of the state instead of more. It will be a boon to the local economy in every case. More money for teachers. More money for policemen. More money for streets, roads and sewage. More money to pay this debt off, which is going to kill us if we don’t find a way to do that. Any sound businessperson knows you can’t have this kind of debt for too long. Interest rates are going up. We’re going to be doomed.”
With stakes that high, it was surprising to hear McGlothlin say, “We have not done a pro forma. This is a new venture and all you’d be doing is just guessing. I feel like we will definitely make our money back and make a little profit. And if it goes as we want it to, it will build this whole area to a standard we would never have dreamed of.”
Even with the caveat that no pro forma has been completed, there has been a great deal of research already put into the project. Stacy and McGlothlin hired the Chmura Group, a Richmond-based consulting firm, to look into what the project could mean in terms of employment and taxes for Bristol.
And it’s not as if the two prime movers are fresh-faced entrepreneurs. “We started in the coal business,” McGlothlin said. “From there we went to being in the steel business in the middle 1970s. We started a company for mine, mill and industrial supplies – we had stores all over the eastern United States. We bought a roof distribution company out of Maryland and then another one out of Houston, distributing roofing materials. We got into the pharmaceutical business and research into migraine headache drugs. We went in with the Gregory brothers on King Pharmaceuticals. We owned part of a company that built computer chips. We went into the oil and gas business. We went into mortgage services in Chicago. We did golf courses and real estate.”
That kind of history is a necessity, McGlothlin said, because the risk involved is far greater than what most investors could, or would, take. Early news accounts said the cost of the project would be in the $50 million range. McGlothlin scoffed at that figure.
“It’s way, way more than that. We have begun to look at estimates on what a hotel will cost and I’m amazed at the per-room cost of a hotel these days. I think, depending on the number of rooms you decide to build and the reclamation and renovation of the mall into the kind of facility we want, you’re talking what we would put in, probably, what the total would cost is something like $300 million to $400 million. We would, no doubt, leverage some of that, but that leaves us having at least 50 percent of that. There’s no way out of that $200 million.”
McGlothlin is confident the Virginia General Assembly will pass a bill allowing Bristol citizens to vote in a referendum on allowing the casino to be built in their community. “The state of Virginia just announced they got 25,000 jobs with Amazon’s new HQ2 for northern Virginia. They paid $573 million to get that, according to the AP. But we’re offering to get 5,000 jobs here within five years and 10,000 regionally because other people will come and other jobs will be created that don’t work right at the casino or the hotel. We’re not asking the state to put up a dollar for these $46,000-a-year-paying jobs.”